BEIJING — China must do more to open its domestic markets to U.S. goods, services and investment as the countries seek to combat the global economic crisis, U.S. Commerce Secretary Gary Locke said on Wednesday.
Locke, on his first official visit to China, said U.S.-China relations were the most important trade relationship in the world, and he outlined crucial issues to be jointly addressed. Chief among them are climate change; working to lower China’s trade surplus and increase its domestic consumption; speeding up currency reform, and avoiding protectionist policies amid the financial crisis.
Locke spoke directly on China’s recent central directive to local governments that they must avoid buying imported products for use in economic stimulus projects, unless absolutely necessary. The “Buy China” policy, revealed a few months after China went after the U.S. for a softer American version, has sparked concern over its potential to turn into a larger trade dispute.
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“A freer trade environment should also be accompanied by a recommitment to enforcing international trade laws and agreements,” Locke said in a speech at the American Chamber of Commerce in China. “The line between advancing important domestic priorities and protectionism can be blurry, and we should work to avoid crossing that line. Unfairly subsidizing domestic companies or denying multinational companies access to local markets and government procurement contracts has the potential to be a serious threat to trade cooperation.”
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In Washington, the International Trade Commission said Wednesday, it has initiated the first trade remedy investigation of textile products from China since quotas were lifted at the end of last year. The ITC said in a Federal Register notice it received a complaint on July 9 that “narrow woven ribbon with woven selvedge” from China and Taiwan was being dumped into the U.S. market or is being subsidized in ways that injure U.S. companies. The petition, filed by Berwick Offray LLC and subsidiary Lion Ribbon Co., referenced the lifting of the textile and apparel quotas as a key factor.
A public hearing on the matter is scheduled for July 30, after which the ITC will issue its decision on whether there is sufficient injury to the U.S. industry for the case to proceed. A determination should be made by the end of next month, according to an ITC spokeswoman.
Locke said he would meet with Chinese officials to discuss issues such as protection of intellectual property rights, technology transfers to China and the need for improvements to China’s legal system. On trade issues, he pressed China to move ahead with reforms to open domestic markets to U.S. goods, services and investment, saying international trade pacts must be honored.
“If China allowed for greater flexibility in its exchange rate and further opened up its domestic markets for imports and foreign direct investment, it would accelerate the world’s return to growth,” Locke said. “Foreign investment can create jobs for Chinese workers and it can do the same for Americans, which is why the American government welcomes Chinese direct investment in the United States.”
Locke said U.S.-China relations were strong, but need to evolve. He noted China had a $270 billion trade surplus with the U.S. and American consumers can no longer afford to spend beyond their means on Chinese-made goods, a cycle that helped to create the world financial crisis.
“The United States and China will continue to have our differences, but we are having differences as mature partners,” he said.